Correlation Between Mayora Indah and Kimia Farma
Can any of the company-specific risk be diversified away by investing in both Mayora Indah and Kimia Farma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mayora Indah and Kimia Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayora Indah Tbk and Kimia Farma Persero, you can compare the effects of market volatilities on Mayora Indah and Kimia Farma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mayora Indah with a short position of Kimia Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayora Indah and Kimia Farma.
Diversification Opportunities for Mayora Indah and Kimia Farma
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mayora and Kimia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mayora Indah Tbk and Kimia Farma Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimia Farma Persero and Mayora Indah is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mayora Indah Tbk are associated (or correlated) with Kimia Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimia Farma Persero has no effect on the direction of Mayora Indah i.e., Mayora Indah and Kimia Farma go up and down completely randomly.
Pair Corralation between Mayora Indah and Kimia Farma
Assuming the 90 days trading horizon Mayora Indah Tbk is expected to under-perform the Kimia Farma. But the stock apears to be less risky and, when comparing its historical volatility, Mayora Indah Tbk is 2.39 times less risky than Kimia Farma. The stock trades about -0.27 of its potential returns per unit of risk. The Kimia Farma Persero is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 60,000 in Kimia Farma Persero on October 22, 2024 and sell it today you would earn a total of 3,000 from holding Kimia Farma Persero or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Mayora Indah Tbk vs. Kimia Farma Persero
Performance |
| Timeline |
| Mayora Indah Tbk |
| Kimia Farma Persero |
Mayora Indah and Kimia Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayora Indah and Kimia Farma
The main advantage of trading using opposite Mayora Indah and Kimia Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayora Indah position performs unexpectedly, Kimia Farma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kimia Farma will offset losses from the drop in Kimia Farma's long position.| Mayora Indah vs. Indofood Cbp Sukses | Mayora Indah vs. Kalbe Farma Tbk | Mayora Indah vs. Unilever Indonesia Tbk | Mayora Indah vs. Ultra Jaya Milk |
| Kimia Farma vs. Indofarma Tbk | Kimia Farma vs. Kalbe Farma Tbk | Kimia Farma vs. Wijaya Karya Beton | Kimia Farma vs. Adhi Karya Persero |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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